As from today all European businesses and citizens will be able to benefit from the Single Euro Payments Area (SEPA), a payment system designed to make electronic banking operations easier amongst EU countries, Iceland, Liechtenstein, Norway and Switzerland.
 
A financial infrastructure has been created in which all electronic payments are considered domestic, and where differencs between national and intra-European cross border payments does not exist.
 
The project aims to improve the efficiency of cross border payments and turn the fragmented national markets for euro payments into a single domestic one. SEPA will enable customers to make cashless euro payments to anyone located anywhere in the area using only a single bank account and a single set of payment instruments.

The project includes the development of common financial instruments, standards, procedures, and infrastructure to enable economies of scale. This should in turn reduce the overall cost to the European economy of moving capital around the region.

Some 4,500 banks already offer SEPA integrated services and by 2010, the majority should be on the SEPA framework. As a result, banks throughout the SEPA area (not just the Eurozone) will need to invest heavily in technology with the capacity to support SEPA payment instruments. They have just three years, until November 2012 to adapt to the new measures.

The introduction of SEPA will increase the intensity of competition among banks and corporates for customers across borders within Europe. It also provides a business opportunity for a range of other organisations, including payment processors such as VocaLink and Equens and SIA-SSB, to help banks reduce costs and develop new payment services.

Multi-national businesses and banks have the opportunity to consolidate their payments processing onto common platforms across the Eurozone. They will benefit from substantial efficiencies by choosing among competing suppliers offering a range of solutions and operating across borders.

For consumers and organizations, SEPA should mean cheaper, more efficient and faster payments transfer when moving Euro from one Eurozone country to another, by making the best use of internet and mobile telephone technology.

SEPA consists of 32 countries:

• the 16 members of European Economic Area (EEA) and EU that are in the Eurozone
• the 11 members of EEA and EU that are not in the Eurozone
• the 3 members of the EEA that are not in the EU: Liechtenstein, Iceland and Norway
• the non EU countries that use the Euro by agreement with the EU, but are not officially part of the Eurozone: Monaco, Switzerland
• the following territories that are considered to be part of the EU in accordance with Article 299 of the Treaty of Rome: Martinique, Guadeloupe, French Guiana, Réunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Åland Islands
• Vatican City and San Marino which use the Euro by agreement with the EU will be part of SEPA.

The principality of Andorra will not, despite its de facto adoption of the euro as its currency, because it does not have an official currency.

Montenegro and Kosovo that use the Euro as their official currency without an agreement with the EU are not part of SEPA.